10 signs you’re on the right financial path

Some people complain they aren’t very good with finances — they argue they don’t have a head for numbers — but I believe everyone can become wealthy if they know how.

Part of it comes down to smart investments, sure, but the other, equally important part, is the financial habits you adopt everyday.

Some of you may wonder from time to time whether you are heading in the right direction.

Here are some of the signs you’re on the right financial path:

You sleep well

Nothing seems to interrupt sleep more than financial stresses.

It’s one of the main areas of life that people stress over.

So if you’re sleeping like a baby, then chances are your finances are in good shape.

You spend less than you earn

Sounds simple, right?

Well, you would be surprised by how many of us don’t heed this basic principle.

If you spend more than you earn you’ll always owe someone money and you’ll never get rich.

You don’t stress about things breaking

Is the fridge on the blink?

Do you need a new vacuum cleaner?

If appliances breaking down send you into a panic, then it suggests you need to start putting a bit more away for a rainy day.

Things will go wrong and break down from time to time.

The trick is to be prepared.

You have clear financial goals

Strategic investors plot a clear path to financial independence.

They don’t just wake up one day and find that they’re extremely well off.

If you want to be financially free, you’re going to need to set clear and well-defined financial goals, such as paying off the mortgage by the time you are 50, or having a certain size asset base of property investments by the time you’re 60.

You know your interest rate

Quite a few Australians would struggle to tell you the interest rate they’re paying on their mortgage.

They may have researched the rate when they were first taking out the loan, but years later they may have lost track of whether their lender has passed on rate cuts or even hiked them up.

People who are on the right financial path pay attention to these rate movements and refinance if need be.

You use credit cards to your advatange

Credit cards are wonderful — in the right hands.

In fact, I think there is no better test of financial literacy than how someone handles a credit card.

If it’s paid off in full each month and used for maximum advantage (frequent flyer points and other perks) then you’re kicking goals.

You have a manageable mortgage

Everyone wants a nice house in a nice suburb, but far too many people borrow too much money and end up with a huge mortgage.

This severely limits not only their power to invest in other properties, but hampers their quality of life, too.

Your mortgage should be manageable, to the extent that interest rate increases will not place you in any financial stress.

You don’t fear losing your job

Redundancy, or the threat of it, is not fun for anyone.

But it will affect some people more than others.

If you’re confident that you would be fine if you lost your job —then this is a good sign.

But if you are living from pay cheque to pay cheque, you could be in for a rude shock.

You aren’t afraid of retiring

There are lots of reports in the media about how many Australians will not have enough money to retire.

That we will be working until we are 90, or whatever the latest estimate is.

But if you have set clear retirement goals and are happy with the way your super balance is tracking, then you are in good financial health!

You don’t ask anyone else to support you

The true mark of financial freedom is not relying on someone else.

If you’re in your early 30s but still regularly drawing from the bank of mum and dad, then you’re not truly independent!

You see, the thing about being on the right financial path is that you can’t choose to step off from it.

It’s a path you stick to, and that requires discipline and consistently making good choices.

Then, and only then, will you really start to see the fruits of your labour.

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Rita is a Property Strategist with an accounting background and has over 30 years’ experience in Commercial Banking for one of the Big 4 Banks. She is a passionate property investor who enjoys helping her clients create wealth through property investment using Metropole’s strategic approach whilst drawing on both her banking and personal experiences.
Rita is known for her honesty and integrity and willingness to assist her clients achieve their goals through property investment.Visit www.MelbourneBuyersAgent.com.au

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